Legato Execs Buck the Bears

Ignore analysts to increase their holdings in the storage management software vendor

Insiders at Legato Systems Inc. (Nasdaq: LGTO) are paying little heed to financial analysts. The bearishness of brokerage houses has not dissuaded Legato executives from a recent binge of buying their companys stock.

In August and September, two top executives and one board member bought 263,000 shares in their company. The move is paying off -- so far. Since their late September purchases, which are the most recent they've reported to the Securities and Exchange Commission, Legatos share price has doubled to 10.85.

The Legato insider moves come at a time when many analysts who follow technology stocks are trying to salvage their reputations, following a year in which their predictions were 180 degrees off the mark. While they were bullish, stocks headed south. And now that its trendy to be bearish, prices are moving upward [ed.note: who knew?].

Nine of the 12 analysts who follow Legato have rated the stock a Hold (read: Sell) for the last three months. Three analysts currently rate it a Weak Buy.

During the last week of September, CEO David Wright picked up 18,000 shares in the 5.40 to 5.50 range, increasing his holdings to 22,428 shares. I thought storage management software was a good investment, he says. And obviously Im not going to buy a competitor, so I bet on myself.